The board of the Los Angeles Unified School District will hold a special meeting Tuesday to consider an agreement with the state to apply for major federal grants.

The deal would make LAUSD eligible for Race to the Top funds, $4.35 billion in stimulus funding that the Obama administration plans to make available through a national competition meant to encourage education innovation and reform.

Up to $700 million may be available to California schools, the state Department of Education estimates.

The voluntary agreement would tie pay to test scores, change state standards, require a new system of data tracking, and allow more charter schools.

School districts must opt in to the agreement with the state by Friday.

California must apply to the federal government by Jan. 19, but before that the Legislature needs to approve changes to education law that would make the state eligible for the funds.